A branch of the Industrial and Commercial Bank of China in Xinhuang Dong Autonomous County, Hunan province. Photo: Wikimedia Commons, Huangdan2060

China’s Ministry of Finance has issued revised performance evaluation rules for commercial banks in order to urge the banks to help support the country’s economy and improve risk control.

Starting from January 1, the revised rules introduced a new performance evaluation mechanism focusing on four areas, including commercial banks’ contribution to national development and the real economy, quality of development, risk prevention and control and operational efficiency. Each area accounted for 25% of the overall performance rating of a commercial bank.

The proportion of the four indicators in the mechanism may be adjusted appropriately according to the macro-economic policy and development of the real economy and financial sectors, according to the rules.

The revision aims to incentivize commercial banks to better implement macro-economic policy and serve the real economy, as well as support their steady operation and high-quality development.

Prior to this amendment, commercial banks were evaluated based on their performance in profitability, operational growth, asset quality and their ability to repay debts.

Fiscal policy

China will improve the efficiency and quality of its fiscal policies by optimizing expenditure structures and strengthening management, Finance Minister Liu Kun told Xinhua in an interview.

The government will normalize its implementation of the specified transfer payment mechanism to raise fiscal spending efficiency while “tightening the belt” to save money and enrich the people, said Liu.

“We will increase the fiscal funds straightly channeled to the prefecture and county-level governments, and expand the scope of the coverage,” he said, adding that the government will also beef up supervision during the process.

China also decided to maintain a certain degree of its policy strength in tax and fee cuts, and continue implementing institutional tax and fee cuts to assist enterprises, Liu said.

Economic growth

The Chinese economy is expected to increase by 7.9% in 2021, following a 2% growth in 2020, the World Bank said in its latest forecast released on Tuesday.

The new growth forecast is one percentage point higher than the one made last June due to suppressed demand and a quick resumption of production and exports in 2020, the global lender said in its 2021 Global Economic Prospects.

The World Bank stated that most emerging markets and developing countries reeling from the contagion were clobbered harder than previously envisioned, feeding through into deeper recessions and a more lackluster recovery.

The report spelled out that the shallower economic contraction in advanced economies, coupled with China’s stronger recovery, has caused the global economic downturn to be slightly lower than previously expected.

Company news

China’s ARJ21 regional jetliner hit a record high annual delivery of 24 aircraft in 2020, according to the Commercial Aircraft Corporation of China (COMAC).

As of the end of 2020, COMAC had delivered a total of 46 ARJ21 aircraft, said the Chinese commercial plane maker, also the developer of C919 single-aisle passenger aircraft.
The China-developed regional jetliner model has entered a phase of accelerated batch delivery and large-scale commercial operation.

COMAC has delivered ARJ21 airplanes to Air China, China Eastern Airlines, China Southern Airlines, Chengdu Airlines, China Express Airlines, Jiangxi Air and Genghis Khan Airlines. As of the end of 2020, these ARJ21 jetliners have safely carried around 1.6 million passengers, COMAC said.

The stories were compiled by Nadeem Xu and KoKo and first published at ATimesCN.com.